Why Your Hotmail Address is Increasing Your Car Insurance

The Times in the UK carried a story this week about how one of our major insurers will quote a higher amount for your car insurance if you provide a Hotmail address!

Motorists seeking cover from Admiral could be charged £31 extra if they use certain email addresses. The insurer said some domain names were “associated with more accidents” than others, raising applicants’ risk profile.

This shouldn’t be a big surprise to email marketers, who will know that address owners will behave in different ways depending on which mailbox provider (MBP) they use. There is plenty of research to validate this:

Back in 2011, Mashable published a study from Hunch which found “68% of Gmail users were in the 18-34 range, likely to be thin, young men with liberal political slants. They were single, childless, not particularly religious, and enjoyed reading blogs.”

Digital Trends found Gmail users are predominantly city dwellers. Hotmail and AOL users are more likely to be found in the suburbs, while rural inhabitants are more likely to use Yahoo!

The same article also identified distinct variances in average age of users. 68% of Gmail users fall into the 18-34 range. That compares to 64% for Hotmail, 57% for Yahoo! and 42% for AOL.

Research from Bluecore amplifies these findings. While Gmail users only form 35% of a typical B2C list’s “Baby Boomers” segment, this increases to 70% for the “Generation Z” segment. Hotmail shows the opposite trend—15% for the former, but only 8% for the latter.

User interests also vary by MBP. Analysis from Mailchimp showed Gmail users are disproportionately interested in mobile, software, and web applications, while the reverse holds true for Hotmail—they are disproportionately disinterested in these trends.

These variances are also have commercial value. Sailthru analysed Black Friday campaigns and found that emails delivered to AOL addresses were more profitable than for other major domains, ± $70 vs ± $35. Gmail reported average revenue per mail (RPM) of $30.97, while Outlook.com users only spent $18.90!

Of course, in an era of big data, where n=All for data analysis purposes, companies like Admiral don’t need to understand why their customers behave in these ways. It is enough simply to establish statistically valid relationships between variables. Identifying a relationship between Hotmail users and the likelihood to have more accidents, cancel early, and make fraudulent claims means business decisions can be taken using these insights.

But it’s still really interesting to understand the drivers (forgive the pun!) behind these different behaviors, so I dug a little deeper. This Google trends report shows that Gmail users (in blue) are indeed more likely to be city-centric (especially in London) while Hotmail users over-index outside of the major centers.

Using this data we can construct a few hypotheses:

Because Gmail users are more likely to live in cities, their car trips are likely to be shorter, and at lower speed. They are more likely to use public transport, and there is also a trend away from ownership in favor of car sharing solutions like Zip Car. With Hotmail users living in more suburban/rural locations, public transport and car sharing are less viable, and their car journeys are likely to be longer and at higher speed.

With Gmail users being younger, one might think they would attract higher premiums, but this doesn’t always hold true. Department for Transport figures show pensioners now account for 1 in 3 driving licences, and they are the only age group to be involved in more accidents between 2010 and 2016. At the same time, government-backed research showed teenagers holding a driving licence have plummeted by almost 40% in two decades.

The fact that Gmail users are more “tech savvy” means on average they will drive a harder bargain. They are less likely to stick with the same insurance provider/bank/utility company/phone service, and more likely to use comparison websites. Both factors will play a role in these users getting better premiums.

So behind the attention grabbing headlines, there are some entirely plausible reasons why Hotmail users may get charged more for their car insurance. Email program owners should consider other ways they can leverage these insights. Restaurant customers may be more/less likely to select casual/upmarket venues depending on life stage. Travelers may be more likely to book airport parking depending on how far they have to drive. There are many dimensions to email optimization, and leveraging mailbox provider information to add more color to your customer profiles could result in meaningful performance uplifts!

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About Guy Hanson

Guy is a passionate advocate for intelligent use of customer data to drive responsive email programs. With a knowledge base that now spans nearly 15 years, he is a global e-mail expert and thought leader. Leading Return Path’s International Professional Services consulting team, Guy has worked with a broad range of clients across 5 continents to improve their email delivery, subscriber engagement and revenue generated.
Outside of work, Guy is the Chairman of the DMA Email Council. In this role, he works with industry peers including brands, agencies, and service providers to promote the best interests of the email industry to a broader audience. He is also a regular contributor to the industry press.